Key Elements from the Profit of Loss Accounts Essay

п»ї Key Elements of the P& L a/c and the Balance Sheet Sales: This is income received after the organization is finished advertising goods or services. Product sales in PPP determine if the company the profit or loss. 2014


ВЈ100, 250

ВЈ105, 800

Expense of Sales: They are the costs a company obtains by making direct sales. In PPP is to understand how much the making of the pizza has cost in order to have a selling price. 2014




Opening Stock: These are generally goods a PPP depends on at the start in the selling period. PPP will need opening inventory in order to work, without opening inventory PPP cannot make any kind of pizzas consequently cannot make a profit. 2014


ВЈ5, five-hundred


Acquisitions: Purchases is definitely the income generated by selling goods and services. PPP's purchases are made by customers ordering pizzas.

Shutting stock: These are goods that the company has after they have finished trading. For example in the event that PPP has its own stock of onions kept then that is certainly its concluding stock. 2014


ВЈ2, 500

ВЈ4, 000

Gross Profit: Major profit is cost of revenue minus turnover. PPP uses the major profit to verify if the company continues to be successful in its accounting period. 2014




Expenses: These are the costs PPP has to shell out while working the business. For example: wages, bills and marketing.

Net prior to tax: This can be defined as PPP's profit just before it pays it includes paid the taxes 2014




Set Assets: These are generally things possessed by PPP over a very long period of time. Set assets help PPP to carry out its work efficiently over a lengthy period of time. PPP's fixed property include: its machinery which in turn it will utilization in the long term to generate its pizza. 2014


ВЈ35, 000

ВЈ38, 000

Current Possessions: These are goods or services used or owned by simply PPP in the year. PPP uses their current resources on a daily basis. PPP's current assets include their stock and debtors. 2014


ВЈ14, 810

ВЈ15, 750

Borrowers: Debtors happen to be people who must pay back PPP cash. For PPP having borrowers is good since it means it includes income to its credit card companies. However it can even be a disadvantage in the event PPP contains a lot of borrowers are not repaying the money due. 2014


ВЈ1, 2 hundred


Current Liabilities: Issues that PPP has owes and has to pay back within a year. Having current liabilities can determine a company's job capital. PPP's current debts include it is creditors. 2014


ВЈ12, 500

ВЈ9, 200

Collectors: These are people who PPP is in debt for money to. Having a large amount of creditors may be bad for PPP because it could trigger being in financial trouble if the business does not generate income.

Working Capital: This really is income PPP has to carry out its day to day activities. The working capital shows just how well PPP is able to repay the cash flow it is the owner of from the current liabilities. Working capital is calculated by subtracting the current resources from the current liabilities.

Total assets much less current financial obligations: For PPP, this is the total assets for example the closing share, debtors, money in the bank and the cash minus the items PPP owes and have to paid in a year that include the credit card companies. The answer received from this can be PPP's working capital.

Talk about Capital: This is actually the amount of money the other shareholders in PPP have spent. Having discuss capital allows you to buy more assets which will would be accustomed to increase profit in the business. 2014


ВЈ18, 000

ВЈ28, 450

Maintained Capital: Maintained capital is capital maintained by business and is certainly not given to stakeholders as returns but instead is reinvested in the business. Capital may be used to expand the organization. 2014


ВЈ9, nine hundred

ВЈ16, 75

Long term financial loans: This a type of loan that is certainly acquired yet has to paid over a season. Acquiring a long term loan permits a company to get equipment or perhaps buy even more assets.




Current Percentage

Current Assets/Current liabilities


=1. 18: 1


=1. 71: 1

Trial Ratio

Current assets-Stock/ Current liabilities...

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